State Funding Needed To Sustain Nebraska Telecom Services

Rural Nebraska has lost some of its federal funding and is in need of state funding in order to continue high-quality broadband services. In cities, there are more people to use and pay for the cell service, making it worthwhile for companies to spend money on their wireless infrastructure. However, rural areas don’t follow the same rules. Rural areas are becoming harder for carriers to cover because it’s getting more expensive to build in those areas. The cell signal has to reach greater areas and there are fewer customers paying for the service. 

The small carriers are at risk because of new regulations that will reduce the federal payments for cable, fiber optic and DSL connections in remote areas, said Michael Balhoff, a Maryland-based telecommunications consultant. (Source: Grant Schulte of the Associated Press)

In order for small carriers to grow without risk, they will need state support and state funding. Without it, the carriers will be unable to provide service in some rural areas because the cost will be too high and the reward too low. This may turn rural areas into an economic wasteland. Without telecommunications services, business won’t be able to run as successfully and profits will decline.

Without the funding, consumers in rural areas would likely see a lower-quality or higher-cost service or possibly none at all, said Cheryl Parrino, a consultant who testified for Nebraska Rural Independent Companies, a trade group. Parrino said fiscal uncertainty and limited funding at the federal level will require Nebraska to play a larger role in keeping the system funded.  (Source: Associated Press)

“In many very-high-cost areas, a business case cannot be made to deliver those services,” Parrino said. “Revenues from customers are simply not enough to cover the cost of deploying, investing and maintaining those operating services.”

Nebraska’s universal service fund distributed $86 million to the state in 2012 but was on track to disperse less than $80 million this year. Nebraska ranks 25th among states in the funding it receives despite its large geographic area and rural population.

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